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Volkswagen: Settlement of civil complaint in the States: Customers will have the right to return their vehicles and get compensations

diesel gateJudge, Charles Breyer, signed the settlement between VW and the owners of polluting diesel vehicles. It is one of the biggest settlements ever and the firm is forced to pay very high compensations to their represents and U.S. customers. According to first information, 1,1 billion euros are going to be paid to represents, 13,6 billion euros to customers. In this case every customer will get approximately 9.000 Euros as compensation. More than 10.000 vehicles will be returned and in consequence, the company will have to repair them to be able to put them on the market again. The juridical system of the U.S. is proven to be customer friendly for one more time.

What about customers from other countries, especially from Europe? Unfortunately, within Europe there is no juridical system allowing class-action lawsuits as it is in the U.S. Only Holland provides some similar options. Therefore, ‘Global Justice Network’, an international association of different law firms has founded in Holland the organization ‘CLEAN’. ‘CLEAN’ will fight for all customers. Our law office is also one of the founders and is representing normally, but not only, Swiss customers. Joining us is not bound on any economical expenses or obligations. That is why everyone owning a polluting diesel vehicle is asked to contact us immediately.

A week before the settlement agreement, lawyers from Global Justice Network, among them our represent Constantin Kokkinos, met in Brazil to talk about further steps in Europe. Differences between the European countries have been discussed. This meeting was the second one especially held for the Volkswagen case. The first one took place in San Francisco. American Lawyers, members of Global Justice Network, have done a great job and helped to achieve the U.S. settlement. They will cooperate with their European colleagues and their know-how will be most important.

The American ruling leaves hope that there will be a similar one for European customers even though the VW concern does not want this. Its directing board would prefer to just fixing the vehicles in question without any other further obligations or the right of return. The more customers will apply for compensation through our association the bigger is our chance of being heard by court and gain justice. That is why we are asking our readers for one more time to contact us if they own one of the polluting diesel cars: without any obligations or expenses for themselves.

First Instance Court Ruling "locks" the exchange rate on Swiss franc loans

                                                                                                                                                swiss franc loans

The first court ruling, in favor of Swiss franc loan borrowers, was published recently by the Multi-Member First Instance Court of Athens intensifying the conflict between the loan borrowers and their bank lenders.

According to court ruling No 334/2016, the Bank is obliged to accept payments of monthly installments as well as the partial or full discharge of Swiss franc loans based on the exchange rate of currency valid at the date of the conclusion of the relevant loan agreements and not based on the exchange rate at the day of payment. That makes a dramatic difference as most currencies including euro have been strongly devalued towards the Swiss franc over the last few years.

In particular, the First Instance Court rules the following:

  • The Bank is obliged to include all interests of installments and payments made by loan borrowers according to the exchange rate valid during the period of disbursement of the loan.
  • The Bank is obliged to accept partial or full payment of installments or the discharge of Swiss franc loans in euros valid at the time of payment of the loan in euros.
  • In case of denunciation of the loan agreement, the Bank must omit the conversion of the loan’s balance in euros based on the current sale price of Swiss francs, at the date of the denunciation.

 

Despite being a lower level court ruling with no immediate execution force, this judicial decision is a positive outcome for thousands of loan borrowers and it will certainly influence settlement of over 9 billion loan agreements denominated in Swiss francs. 

Furthermore, if this judgment is confirmed by Higher Courts it will constitute binding case law for forthcoming similar rulings eventually leading to a legislative intervention or Ministerial decision for settling the matter in compliance with the Court’s rulings.

 

Switzerland: Automatic exchange of financial account information (AEOI) (Q&A)

Which information will be automatically exchanged ?

The information to be transmitted includes account and tax identification numbers as well as the names, addresses and dates of birth of taxpayers abroad with an account in a country other than the country of origin, all types of capital income and account balances. The standard covers both natural persons and legal entities. The actual beneficial owners of the account in accordance with the international provisions on combating money laundering (FATF) must be identified.

How is the automatic exchange of information conducted?

Banks, certain collective investment vehicles and certain insurance companies collect financial information on their clients who are resident abroad for tax purposes. Once per year, these financial institutions send the information to their national tax authority, which automatically transmits the information received to the tax authority in the relevant partner country.

What happens with the data that is exchanged?

Client data may be used solely for the agreed purpose, i.e. the correct taxation of taxpayers in this case. However, the standard does not indicate precisely how the national tax authorities are to do this (e.g. spot checks or extensive data reviews). Data protection has to be ensured.

When will Switzerland introduce the AEOI?

Swiss financial institutions will start to collect the account data of taxpayers abroad in 2017. The first exchange of data with a wide range of partner states and territories will take place in 2018.

Does the AEOI agreement with the EU include all member states?

Yes. The AEOI agreement with the EU applies equally to all member states. Specific agreements with individual EU countries are not necessary. Furthermore, the agreement also applies to Gibraltar on the basis of internal EU provisions.

With regard to the automatic exchange of information standard, will the United States get preferential treatment in relation to transparency of financial constructs?

The United States has approved the OECD's AEOI standard. This is based on the US FATCA model, which will continue to exist. Consequently, temporary exceptions will apply for the United States for a given period. For example, US financial institutions do not have to identify the beneficial owners of foreign investment companies that have not concluded an agreement as a Foreign Financial Institution (FFI) with the United States and are located in a country that has not concluded a FATCA agreement with the United States. However, the United States will levy a withholding tax of 30% on the gross amount of all revenue and sales proceeds from US securities.

For how long will the United States be allowed such an arrangement?

Faced with increasing criticism from the international community, the United States announced at the G20 meeting in April 2016 that it would adopt internal measures in the near future to eliminate certain loopholes and make certain constructs in the United States less attractive.

How will Switzerland use data on Swiss taxpayers with accounts abroad that it receives within the scope of the reciprocal exchange of information?

The domestic use of data received from abroad is up to the individual countries. Given that the cantonal or communal tax administrations are responsible for tax assessments in Switzerland, the Federal Tax Administration (FTA) will forward the financial information received from abroad to the competent assessment authorities for the application and enforcement of Swiss tax law.

Does the global standard for the AEOI apply domestically as well?

No. The international standard governs only the international exchange of client data for tax authorities. Transparency within the states will continue to be determined by the states themselves.

 

Source: DFF/SFI (Switzerland)

The ECHR ruled in a pilot case that the Greek bond haircut was legal.

The “haircut” on bonds held by individuals geared to restructuring the Greek public debt during the crisis did not violate their property rights.
In today’s Chamber judgment (21st of July 2016)  in the case of Mamatas and Others v. Greece (application
nos. 63066/14, 64297/14 and 66106/14) the European Court of Human Rights held, unanimously that there had been:
no violation of Article 1 of Protocol No. 1 (protection of property) to the European Convention on Human Rights;
no violation of Article 14 (prohibition of discrimination) of the Convention, in conjunction with Article 1 of Protocol No. 1 to the Convention.
The case concerned the forcible participation by the applicants, who are private individuals holding Greek State bonds, in the effort to reduce the Greek public debt by exchanging their bonds for other debt instruments of lesser value. In 2012 a new law amended the conditions governing the bonds by dint of Collective Action Clauses enabling bond-holders to conclude a collective agreement with the State, deciding by an enhanced majority. That majority having been obtained thanks, in particular, to the participation of the institutional investors (banks and credit organisations), the new conditions came into force in respect of all bond-holders, including the applicants, despite the latter’s refusal. Their bonds were cancelled and replaced by new securities worth 53.5% less in terms of nominal value. This forcible participation amounted to an interference with the applicants’ right to respect for their property for the purposes of Article 1 of Protocol No. 1 to the Convention. Nevertheless, that interference pursued a public-interest aim, that is to say preserving economic stability and
restructuring the national debt, at a time when Greece was engulfed in a serious economic crisis. The Court therefore held that the applicants had not suffered any special or excessive burden, in view, particularly, of the States’ wide margin of appreciation in that sphere and of the reduction of the commercial value of the bonds, which had already been affected by the reduced solvency of the State, which would probably have been unable to honour its obligations under the clauses included in the old bonds before the entry into force of the new Law. The Court also considered that the collective action clauses and the restructuring of the public debt had represented an appropriate and necessary means of reducing the public debt and saving the State from bankruptcy, that investing in bonds was never risk-free and that the applicants should have been aware of the
vagaries  of the financial market and the risk of a possible drop in the value of their bonds, considering the Greek deficit and the country’s large debt, even before the 2009 crisis. The Court also found that the bond exchange procedure had not been discriminatory, in particular because of the difficulty of locating bond-holders on such a volatile market, the difficulty of establishing precise criteria for differentiating between bond-holders, the risk of jeopardizbing the whole operation, with disastrous consequences for the economy, and the need to act rapidly in order to restructure the debt.

Under Articles 43 and 44 of the Convention, this Chamber judgment is not final. During the three-month period following its delivery, any party may request that the case be referred to the Grand Chamber of the Court. If such a request is made, a panel of five judges considers whether the case deserves further examination. In that event, the Grand Chamber will hear the case and deliver a final judgment. If the referral request is refused, the Chamber judgment will become final on that day. Once a judgment becomes final, it is transmitted to the Committee of Ministers of the Council of Europe for supervision of its execution.

ONE OF THE FEW LAW FIRMS TO DEAL WITH THE COMPLEX IATA BSP SYSTEM RULES AND REGULATIONS

Our roots in the Aviation law are very deep:  started over 30 years ago and covering almost every field of it. More specifically we are dealing with rules and regulations of the Montreal Convention, the Warsaw Convention, the IATA (International Air Transport Association) Regulations and Resolutions Procedures and also the ICAO (International Civil Aviation Organisation) Proceedings.

We are proud to be one of the few aviation law firms in Europe (if not the only one!)  to deal with disputes of travel agencies working with the  International Air Transport Association. IATA represents most scheduled airlines world’s airlines, some 265 carriers or 83% of the total air traffic. IATA manages a worldwide electronic ticketing system called the Billing and Settlement Plan (BSP) which allows for reservation, sale and payment of air plane tickets by travel agencies around the world. This is a very complex system as, at the close of 2014, there were BSP operations in 181 countries and territories. The system currently serves 400 participating airlines with an on-time settlement rate of 99.98%. In 2014, IATA's BSP processed $255.7 billion.

ELC was involved with this complex issue several times, mostly representing travel agencies which were accredited by IATA to issue ticket online through its BSP ticketing system. 

In particular, we have successfully defended travel agents from Denmark, the U.K. the U.S. and Greece  on their issues with IATA in front of the Travel Agency Commissioner (an internal arbitration proceedings under IATA Regulation) and also on arbitration proceedings under the ICC Rules.

ELC PIONEERS THE VW ISSUE ON THE MADRID GJN WORLD CONFERENCE

As a founding member of the Global justice Network (GJN), our law firm participated in the GJN Spring Conference which was held in Madrid on May 26-28 , 2016. It was a very successful event where over 40 participants took part in,essentially  focusing on the Volkswagen collective claims issue. Two out of our three US partner law firms were retained from the US Judge for representing concerned American VW owners in class action. In Europe where unfortunately such legal tool does not exist claiming the consumer's rights is more difficult and in any case fairly complicated.This difference in our legal systems could well be behind the motivation of the giant German manufacturer to announce that it intends to indemnify American concerned VW owners but not the European ones. Nevertheless the plaintiff law firms members of the GJN with a solid proven record on such issues have pioneered the way of attempting to protect European consumers through an interesting legal possibility that exists only in the Netherlands where we also have a major law firm as a founding partner and have established along with the other members of our network a stichting (foundation) under the acronym CLEAN so as to participate in a collective claim, for and on behalf of European concerned VW owners who were affected by the fraud. So much is to be seen within the forthcoming months during which all concerned European consumers are invited to join the action without any obligation of their part.

In addition to the VW diesel issue , the event offered workshops on financial litigation, human rights and pharmaceutical and medical devices. ELC's partner Constantin Kokkinos who is honored to be part of GJN's executive committee intervened on several topics during that conference on the VW Diesel issue as well as on cross border financial litigation matters.  


           

                       

Our Irish partner attorney B‎rain O'Reilly passed away

We are very saddened to hear of our GJN treasurer and collegue 's loss, Brian O'Reilly.

We will sorely miss his sense of humour, honesty and efficiency.

Our prayers and thoughts are with his family during this difficult time

.Brian O'Reilly

GJN Spring 2016 Conference Madrid 26-28 May 2016

Our lawyers are taking part in GJN’s Spring 2016 Conference which is held in Madrid, Spain. It focuses on cross border litigation and offers workshops on financial litigation, human rights and pharmaceutical and medical devices. A panel composed by lawyers from 15 different nationalities including our American colleagues from Lieff Cabraiser, Keller Rohrback and Jack Russo are also discussing about Volkswagen “Clean Diesel” litigation, focusing on the evolution of the case in the US where things are moving quicker and more efficient than in Europe.

BREAKING NEWS: EGYPTAIR MS804 PLANE CRASHED

EgyptAir flight MS 804 from Paris to Cairo has crashed in the Mediterranean Sea, somewhere between the south of the Greek island of Karpathos and the southeast of the island of Crete. The plane was carrying 56 passengers and 10 crew members, whose fate is unknown. The nationalities of the passengers were reportedly as follows: 30 Egyptians, 15 French citizens, two Iraqis and one person each from Britain, Belgium, Sudan, Chad, Canada, Kuwait, Saudi Arabia, Portugal and Algeria. Our law firm, as part of the Global Justice Network  (whose members are recognized as being among the most experienced aviation accident lawyers  in the world), is closely monitoring the situation and assessing its impacts in conjunction with its international partners.

 

ELC: Major arbitration successful outcome

It is with great pleasure and satisfaction that we received the final ruling of an arbitration Court that has granted a very substantial amount to our client a major construction company that had claims from a public State owned enterprise. The Arbitration process has lasted long -almost a year- and after many lengthy sessions and several hundred pages of supporting documents the Court has come into a very well founded conclusion that was granting right to our client. 

This success confirms our committment to the process of arbitration justice especially into international lcorporate and industrial disputes. Our Law firm in conjunction with its international network that specalizes into such solutions has a remarkable experience on dispute resolution process at the ICC Paris (International chamber of commerce) that has successfully handled in the past. In addition we are also familiar with the process and rules of the London Arbitration and of the recently unified Swiss Chambers of Commerce.